Stride Rite Posts Per Share Earnings Gain of 14%
LEXINGTON, Mass.--(BUSINESS WIRE)--June 22, 2000--The Stride Rite Corporation (NYSE:SRR) today reported increased earnings for the second quarter of its 2000 fiscal year.
Net sales for the second quarter of fiscal 2000 were $156.5 million, a decrease of 6% from the net sales of $166.3 million in the comparable period of fiscal 1999. Despite the lower sales volume, net income for the second quarter of 2000 increased 9% to $10.6 million from $9.8 million in 1999. Aided by the Company's continuing share repurchase program, earnings per share grew at a faster rate during the second quarter, increasing 14% to $.24 per share on a diluted basis in 2000 from $.21 per diluted share in the 1999 second quarter.
For the first six months of fiscal 2000, net sales were 2% lower than revenues for the first half of last year, $308.2 million in 2000 as compared to $314.4 million in 1999. Net income for the first half of fiscal 2000 totaled $18.1 million, an increase of 14% from the $15.9 million earned in the comparable period of 1999. On a diluted basis, earnings per share increased 21% in the first six months to $.41 in 2000 from $.34 in 1999's first half.
The Stride Rite Children's Group delivered a solid sales performance during the second quarter of fiscal 2000. Stride Rite Children's sales increased 11% in the second quarter of 2000, with sales to independent retailers up 13% and sales at company-owned retail stores 9% above the second quarter of 1999. Sales of comparable, company-owned retail stores increased 3.9% during the second quarter of fiscal 2000. Sales of Tommy Hilfiger footwear products decreased 23% in the second quarter of 2000, resulting in a first half sales decrease of 11% below the revenues achieved in the first six months of 1999. Sales of the Keds business were also lower in the second quarter of 2000, down 8% from the comparable period of 1999 as the brand continued to transition its core styles to new and improved products. For the first six months of 2000, Keds sales decreased 1% from 1999. Sperry's sales in the second quarter of 2000 were down 4% from 1999 to narrow the first half revenue gain to 1% above last year.
David M. Chamberlain, Stride Rite's Chairman and CEO, commented, "For the most part, our company-owned brands are meeting the sales and earnings goals that we set coming into fiscal 2000. However, the performance of the Tommy Hilfiger footwear business has been a challenge for the first half of 2000. We have made good progress in the Stride Rite Children's business, helped by the introduction of our new baby product line featuring the Natural Motion System(TM). While sales of the Keds brand were down slightly in the first six months of 2000, we have completed a major product transition which we expect will position the business for growth in Spring 2001. Sperry's product line is also stronger going into the second half of fiscal 2000 as we continue to build the brand into a more year-round business. Although the prospects for the Tommy Hilfiger footwear business appear to be brighter in the second half of fiscal 2000, we will probably fall short of our goals for the full fiscal year. Our balance sheet continues to be well managed. At the end of the second quarter of 2000, our cash and investments balance totals $51.1 million, up 22% from the 1999 amount. Inventory levels showed a strong improvement from last year, down 28% from 1999 as we enter the Fall season."
A summary of sales and net income for the second quarter and the first half is provided below. A more detailed balance sheet and income statement follows this release. -0-
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(in thousands)
For the Quarter Ended For the Six Months Ended
June 2, May 28, June 2, May 28,
2000 1999 2000 1999
Net sales $156,534 $166,253 $308,196 $314,437
Net income 10,609 9,763 18,096 15,912
Net income
per share of
common stock:
Diluted $ .24 $ .21 $ .41 $ .34
Basic $ .25 $ .21 $ .42 $ .34
Shares used
in per share
computations:
Diluted 43,474 46,840 43,789 46,685
Basic 43,221 46,422 43,600 46,408
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The Stride Rite Corporation markets the leading brand of high quality children's shoes in the United States. Other footwear products for children and adults are marketed by the Company under well-known brand names, including Keds, Sperry, Tommy Hilfiger, Nine West Kids, Grasshoppers and Street Hot. Information about the Company, including a replay of the second quarter conference call with management, is available on our website - www.strideritecorp.com. The Company will provide an on line web simulcast of its second quarter conference call. The live broadcast of Stride Rite's quarterly conference call will be available on line at www.streetevents.com, beginning at 10:AM EDT on June 22, 2000. The on line replay will follow shortly after the call and will continue through June 29, 2000. Information about the Company's brands and product lines is available at www.striderite.com, www.keds.com and www.sperrytopsider.com.
This announcement contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities and Exchange Act of 1934. The words "expect", "estimate", and other similar expressions which do not relate solely to historical matters identify forward-looking statements. Undue reliance should not be placed on forward-looking statements because they involve known and unknown risks and uncertainties which may cause actual results to differ materially from anticipated, projected or implied future results. Factors that may cause such a difference include, among others: revenues from new product lines may fall below expectations; the launch of new product lines may be delayed; and additional factors discussed in the Company's reports filed with the Securities and Exchange Commission and the exhibits thereto. The Company disclaims any responsibility to update these statements. -0-
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The Stride Rite Corporation
Summarized Financial Information
for the periods ended June 2, 2000 and May 28, 1999
Statements of Income
(in thousands)
Second Quarter Six Months
2000 1999 2000 1999
Net sales $ 156,534 $ 166,253 $ 308,196 $ 314,437
Cost of sales 98,670 105,012 195,435 198,689
Gross profit 57,864 61,241 112,761 115,748
Selling and
administrative
expenses 40,854 45,320 84,119 89,860
Operating income 17,010 15,921 28,642 25,888
Other income
(expense), net 50 (233) 480 (286)
Income before
income taxes 17,060 15,688 29,122 25,602
Provision for
income taxes 6,451 5,925 11,026 9,690
Net income $ 10,609 $ 9,763 $ 18,096 $ 15,912
Balance Sheets
Assets: 2000 1999
Cash and short-term investments $ 40,911 $ 30,560
Accounts receivable 82,976 85,456
Inventories 79,021 110,472
Deferred income taxes 26,303 24,758
Other current assets 4,525 3,583
Total current assets 233,736 254,829
Property and equipment, net 72,064 63,626
Non-current fixed income investments 10,152 11,278
Other assets 10,640 13,060
Total assets $326,593 $342,793
Liabilities and Stockholders' Equity:
Current liabilities 66,556 80,204
Deferred income taxes 5,218 6,042
Stockholders' equity 254,819 256,547
Total liabilities and
stockholders' equity $326,593 $342,793
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CONTACT: The Stride Rite Corporation
John M. Kelliher
(617) 824-6028